Graincorp takeover: Business Council hits out at Joe Hockey's rejection of Archer Daniels Midland bid

The Business Council of Australia has warned the Federal Government's decision to reject ADM's proposed takeover of GrainCorp takeover could put at risk critical foreign investment in the future.

Treasurer Joe Hockey on Friday announced the decision to reject Archer Daniels Midland's $3.4 billion bid for the eastern grain handle, saying he had to take the national interest into account.

But the BCA has hit out at Mr Hockey's decision, suggesting it undermines the Government's message that Australia is "open for business".

The council's chief executive Jennifer Westacott says the Government must be transparent when making decisions about foreign investment in the national interest.

"The Treasurer's statement that sufficient competition had not emerged in grain handling to allow the acquisition is at odds with the ACCC's view that there was unlikely to be substantially lessened competition as the merged entity would continue to face competition from a number of sources," she said in a statement.

The BCA is keen to emphasise that the ADM decision was a one-off and that 130 other foreign investments have received approval.

Speaking with Radio National's Saturday Extra program, Ms Westacott said the details of the decision need to be explained.

"It needs to be very clear: what were the factors that led to this decision? What was the national-interest issue? So that we're not sending a confused signal to the global community about being open for business," she said.

"But we've also got to remember that this Government and the government before it were actually very disposed to foreign investment and most of the decisions have been approvals."

Famers split on GrainCorp decision

While businesses were universally concerned by the decision, farmer reaction was mixed.

John Minogue is a grain farmer from central New South Wales.

"I think the deal for them has the potential to monopolise and manipulate the market and ADM has a history of that," he said.

"I also believe that it would reduce competition in the market place from either foreign-owned company owning our major grain receiver asset."

But Matt Linnegar from the National Farmers' Federation says the blocked bid could leave GrainCorp and other agribusinesses short of money to invest.

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"Will they have the capital to make the sorts of investments in the hundreds of millions of dollars that are required to bring that infrastructure up to speed and make it as efficient as possible?" he said.

"If we're concerned here about farm gate returns, then they clearly need an efficient system, so that sort of investment is still needed."

The Government offered to let ADM lift its stake in GrainCorp to 24.9 per cent, and ADM vice-president Victoria Podesta says the company will think about the offer.

"We'll certainly consider what our options are," she said.

"It's too early to have an informed opinion on that, but it's certainly something we will consider."

Ms Podesta says the company has a whole world of opportunities beyond Australia.

"When I speak of opportunities ahead of us, I'm talking about the global opportunities that we see," she said.